HCSP Plan Basics & Features

  • How do I enroll in HCSP?
  • You are automatically enrolled in the Plan as directed by the bargaining agreement and/or personnel policy of your employer. When MSRS receives the first contribution from your employer, an account will be established for you. MSRS will send you an “HCSP welcome packet” that includes an Information Guide, investment information, and the forms you need to get started.

  • How do I manage and keep informed about my account?
  • There are several ways to keep informed. You can access your account information or initiate trades 24/7 on this website1 or call the Automated Voice Response (AVR) System1 at 1-800-657-5757, option 2. Or contact the MSRS Service Center2 at 1-800-657-5757, option 3. Representatives are available to answer plan-related questions and assist you with transactions any business day between 8 a.m. and 4:30 p.m. Central Time.

    1
    Access to the voice response system and/or any website may be limited or unavailable during periods of peak demand, market volatility, systems upgrades/maintenance or other reasons.
    2 Representatives of GWFS Equities, Inc. are not registered investment advisors and cannot offer financial, legal or tax advice. Please consult with your financial planner, attorney and/or tax advisor as needed.

     

  • Am I able to have multiple tax-advantaged medical savings plans?
  • Participation in the HCSP does not limit your ability to have other types of tax-advantaged medical savings plans, such as an FSA, HSA, or HRA. You cannot, however, request reimbursement of the same expense from multiple plans. Also, please be aware that compatibility issues exist between a Health Savings Account (HSA)and other tax-advantaged medical savings plans, including the HCSP. For more detail, please see HCSP/HSA Compatibility.

  • Is there a minimum or maximum contibution limit?
  • The HCSP does not impose a minimum annual contribution amount. Generally, there is no maximum contribution limit; however, depending on the employer's HCSP plan design and number of employees in the group, limitations could apply.

  • If I leave public employment, can the account balance be refunded to me in cash?
  • No. Payouts can only be made for the reimbursement of eligible health care expenses.

  • Can my HCSP account balance be transferred to another health care plan?
  • No. The HCSP does not allow transfers or rollovers to another tax-advantaged medical savings plan.

  • Are there any provision for loans or emergency withdrawals?
  • No. The HCSP does not allow loans or emergency withdrawals. The Plan can only be used for the reimbursement of eligible medical expenses.

HCSP Investments

  • How are my contributions invested?
  • Contributions to your HCSP are automatically invested in the Money Market Fund unless you elect one or more of the investment options offered by the Plan. You can change your investment allocation or transfer any portion of your existing account balance at any time.

    An investment in a Money Market Fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the Fund.

     

  • How do I transfer money between different investment options in my account?
  • You can adjust the mix of investments in your HCSP account at any time. To initiate a transfer, log in to your Account Online1 and select the Transactions icon. You can also make the change on the Automated Voice Response System at 1-800-657-57571, option 2, or contact MSRS at  651-296-2761 or1-800-657-57572, option 3.
     

    1 Access to the voice response system and/or any website may be limited or unavailable during periods of peak demand, market volatility, systems upgrades/maintenance or other reasons.
    2 Representatives of GWFS Equities, Inc. are not registered investment advisors and cannot offer financial, legal or tax advice. Please consult with your financial planner, attorney and/or tax advisor as needed.

  • If I initiate a transfer, when will my request be processed?
  • Transfer requests initiated prior to 3:00 p.m. Central Time will be processed at the close of the financial markets on that business day. Transfer requests initiated after 3:00 p.m. Central Time or on non-business days will be processed at the close of the financial markets on the next business day.

  • Are there any restrictions or fees when I trade between investment options?
  • There are no fees associated with an HCSP transfer.

    Trading restrictions: You cannot transfer money directly from the Stable Value Fund to the Money Market Fund.

    An investment in a Money Market Fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the Fund.

HCSP Reimbursements

  • When am I eligible to request reimbursements?
  • You can access your HCSP account for the reimbursement of eligible medical expenses when you separate from service at any age, retire, or collect a disability benefit from a Minnesota public pension plan.

  • What is the maximum annual reimbursement amount?
  • The maximum annual reimbursement limit for 2016 is $29,000 and 2017 is $30,000. This limit applies to all eligible medical expenses except medical, dental, and long-term care insurance premium reimbursements. Expenses that are incurred in a calendar year in which you exceed the limits can be submitted for reimbursement in subsequent calendar years.

  • If I return to work after termination can I request reimbursements?
  • If you return to work after termination or retirement, your eligibility to request reimbursements depends on the circumstances of your employment. You may have limited or no access to your HCSP account. Please see Returning to Work for more details.

  • Are there any deadlines to submit my reimbursement requests?
  • There is no time restriction on when you must begin taking money out of your account or how long you have to deplete the account. You can submit reimbursement requests at any time for any eligible health care expenses incurred this year or in any previous year, as long as the expense was incurred after you retired or terminated from your public employer. Expenses do not have to be reimbursed in the same calendar year they were incurred.

  • How do I report reimbursements on my income tax returns?
  • The HCSP is tax free, which means both contributions and reimbursements are not reportable on your income tax returns. You will not receive an IRS Form 1099-R for this account. Exception: Reimbursements to a non-spousal, non-dependent beneficiary from an inherited HCSP are reportable as income. A 1099-MISC will be sent to the beneficiary to report reimbursements.

  • Can I be reimbursed for expenses incurred by my domestic partner?
  • No. Federal law does not recognize domestic partnerships. However, you can request reimbursements for eligible medical expenses incurred by your domestic partner if they are your legal tax dependent.

  • What is the maximum annual reimbursement amount for Long-Term Care (LTC) premiums?
  • Publication 502 limits the annual LTC premium reimbursement amount. The maximum reimbursement amount for 2016 ranges from $390 to $4,870 and is determined by the age of the covered person. Please refer to Publication 502 for more detail.

HCSP Beneficiary & Survivor Benefits

  • Is it necessary to designate a beneficiary if I have a spouse and/or legal dependents?
  • Even if you have a spouse or legal dependents, we recommend that you have a beneficiary designation on your account because your situation may change. Life events – including marriage, divorce, death, or children growing up – can impact who will receive any remaining HCSP assets upon your death. We encourage you to periodically review your HCSP beneficiary designation to ensure it’s still appropriate.

  • Can my spouse or legal dependents be my designated beneficiary?
  • Your spouse and/or legal dependents are automatically entitled to any remaining account balance upon your death. The beneficiary is the person next in line to receive the balance. Think of your beneficiary designation as a backup, or "contingent" beneficiary, in the event there is no spouse or dependents. Note: once your child is no longer a legal dependent, he/she can be listed as your beneficiary.

  • Is it possible for a domestic partner to inherit the HCSP account balance?
  • A domestic partner does not qualify as a surviving spouse under federal law; however, he/she can be the designated beneficiary. If you have no surviving legal tax dependents, then the domestic partner, as the named beneficiary, can inherit the account balance to be used for the reimbursement of eligible health care expenses. Please be aware that reimbursements paid to your domestic partner are taxed as ordinary income.

  • Why doesn't my spouse's name appear on my quarterly statement?
  • Neither your spouse nor legal dependent's name appear on the quarterly statement under "Beneficiary Information" because they are not considered a designated beneficiary. They are, by law, entitled to the account balance upon your death and therefore, supersede a beneficiary designation.

  • What is a legal tax dependent?
  • A legal tax dependent is a person who can be claimed on your tax returns. For more guidance, please see Form 1040 Instructions, which are available at http://www.irs.gov. Please note: although you can request reimbursement of medical expenses you paid for children up to their 26th birthday, he/she is not entitled to any remaining account balance unless they are a legal dependent and there is no surviving spouse. Adult children who are no longer dependents can be named as a beneficiary.

  • Who can I name as my beneficiary?
  • Your designated beneficiary can be any living person(s) other than your survivor or legal dependents (they are automatically entitled to the money upon your death). Because HCSP funds must be used for reimbursement of out-of-pocket health care expenses incurred by a natural person, MSRS cannot accept a beneficiary designation for a non-living entity including a trust, estate, or charitable organization.

  • How do I designate a beneficiary?
  • ou must complete a Beneficiary Designation form. A beneficiary designation is effective upon receipt by MSRS and supersedes all prior designations. A valid beneficiary designation must be on file with MSRS prior to your death.

  • Can I change or remove a designated beneficiary?
  • Yes. To change or remove the existing beneficiary, you must complete a Beneficiary Designation form. A beneficiary designation is effective upon receipt by MSRS and supersedes all prior designations. A valid beneficiary designation must be on file with MSRS prior to your death.

  • I have multiple MSRS-administered retirement plans. Do I need to designate a beneficiary for each plan?
  • The HCSP beneficiary designation is separate from other MSRS-administered plans (such as the MNDCP or pension). You will need to designate a beneficiary for each plan.

HCSP Death

  • What happens to my HCSP account if I die?
  • If there is a balance remaining in your account upon your death, it is transferred to an HCSP account for your spouse. If there is no spouse, then it's transferred to an HCSP account for your legal dependent(s). Reimbursements to a spouse or legal dependents are tax-free.

    If you do not have a spouse or legal dependent, then the money is transferred to an HCSP account for your designated beneficiary. Reimbursements to a beneficiary are subject to federal and state income taxes.

    If you do not have a spouse, legal dependent, or designated beneficiary, then the representative of your estate will be asked to name a beneficiary who is eligible to receive any remaining account balance.

  • What happens to the account balance if there is no spouse, dependents or beneficiary?
  • The personal representative of your estate will be asked to name a beneficiary. HCSP assets cannot be distributed to the estate because the balance must be used for reimbursement of healthcare expenses incurred by a natural person. Be assured that upon your death the assets are always passed on to an heir.

  • Can my spouse waive his/her rights to the HCSP assets?
  • Minnesota Statute 352.98 requires MSRS to transfer funds to a surviving spouse upon the participant’s death; therefore, the spouse cannot disclaim their rights to the money.

  • Can a designated beneficiary waive their rights to the HCSP assets?
  • Yes, however, the beneficiary who disclaims their right to the remaining account balance cannot choose who will receive their portion. Instead, their portion of the money will be divided among all other designated beneficiaires. If there are no other beneficiaries, then the personal representative of the estate will name the person(s) eligible to receive the assets that were disclaimed.

  • Can I indicate "per stirpes" when designating a beneficiary?
  • HCSP does not allow a per stirpes beneficiary designation. If you are predeceased by your beneficiary, their portion of the assets would be divided among all other surviving designated beneficiaries.